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October 30, 2014

One Year Ago: Are We Feeling Better Yet?

Just about one year ago we began the adventure called by various names, with Obamacare, the one used most often. The infamous web site, Healthcare.gov, was launched to great fanfare - and quickly became a disaster. The president's signature legislative program almost ended before it began. While I don't think the miscues were related to the hacking problem I wrote about a few weeks ago, the government couldn't design a web site that worked.

One year later, where are we? The new enrollment period for health coverage starts on November 15th and runs through February. Encouraging words about the web site's performance this year give those of us who must navigate its depths some hope. The 76 pages of application information have been cut to 16. Back buttons are supposed to work, like every other web site in the world. In theory, once certain information is entered it doesn't have to be re-entered.

For me, none of this matters. Medicare and a Medigap supplement policy have simplified my life. Yes, my Part D drug coverage insurer wanted to raise my rates by 35%, so I just switched to another company with lower prices. That was a minor hassle compared to when I was part of the horror of the private insurance, individual market.

My wife, Betty, however, must jump back in. Last year her application became so fouled up we had to go through the "Resolution Center" to get her covered. Now, her insurance company has informed her the policy she has will not be available next year so her health insurance ends on December 31st. Her options? Buy a similar policy through the same company for a lot more money and no tax subsidy, or pay a visit to healthcare.gov and hope for the best. Because of the price difference the latter is her choice.

I imagine she will have to do this every year for the next 4 years until she qualifies for Medicare. The companies selling the insurance through the exchanges are looking for legal ways to increase their income and one way is to hope people simply buy a more expensive product directly from the company rather than put up with the on-line hassle to find a cheaper alternative.Even with the hassles the policy she purchased through the exchange has been a real benefit. A trip to an emergency room in June that would have cost us $8,800 for a few tests under her old policy, ended up costing $150. She is fine, by the way. What we thought was wrong, was not. And, to pay $150 out of pocket for what all the fine folks did at Paradise Valley Hospital for her (and me) was an very welcome benefit of her new policy.

In a study released by AARP magazine two weeks ago, one finding stuns me:

*Almost four in ten 50+ workers (38%) are not saving for health care costs, and many (44%) do not have any plans to do so in the future.I can understand the first part of that statistic. Though I am willing to bet there are places to cut expenses today to have some reserves for the future, I imagine many of those in the 38% don't believe they can afford to save. I could say they can't afford NOT to save, but sometimes life doesn't cooperate.But, for 44% to say they are not going to save in the future? What are they thinking? There is no health care fairy that leaves money under your pillow at night. There is very little chance you will get through the last few decades of life without medical expenses that strain, or even shatter, your resources. 10 million of our fellow citizens who didn't have any health insurance before last year do now. Tens of millions more are not having their preexisting conditions prevent them from getting decent coverage (like Betty). That adds up to a lot of people who no longer treat the emergency room as their only option.Others found out they couldn't keep the plan and doctors they had before the law took effect and were forced to take part, sometimes at a greater cost, other times for less money with a government subsidy in place. But, the disruption and uncertainty was upsetting.This is not a political post and I ask that your comments don't try to turn it into one that points fingers, even if you are still in the camp that wants to repeal Obamacare. Nor am I dealing with insurance issued through your employer. The goal for this post is to ask a few follow up questions. if you purchased insurance on-line from healthcare.gov or through an insurance company's web site, I am interested in your actual experiences since this time last year: - Has your medical care improved or gotten worse? Why?

- Are your medical expenses higher or lower? Consider not just your premiums but also out-of-pocket expenses for prescriptions and copays.

- Did you use the health exchange last year?

- If so, are you planning on using it again this year for find a better deal?

46 comments:

As a Canadian this doesn't affect me directly but I do wonder why the US Medicare plan wasn't just extended to all US citizens and residents. The Medicare program is already in place and from what you say it works well - certainly those covered by US Medicare seem to like it. This is not a criticism of the US system, each society needs to select what is best for them, though from the outside it looks like the simple solution wasn't the one selected. In any case, I hope Betty finds the health care coverage she needs for a decent price.

The problem with Medicare for all is that becomes a "single pay" system and there are strong political objections from many. Logically, you are right: the system has proven to work well, hold down costs, and it is up and running. But, strongly held opinions often trump the logical answer.

Thanks for your good wishes. We only have 30 days to get Betty's new policy in place; I hope the web site works as promised.

I will be watching the replies too. This is our first year we can apply for Obamacare and I can't wait! Our expenses for insurance have always been high, as we were self employed before retirement. We now live in a much smaller town, but it looks like most of the docs are on the Obamacare plans, as is the local hospital.We are 2 hours from a ride to the valley where more doctors and hospitals are available should the need arise . My initial research seemed to show that I will be paying at LEAST half of of what we pay now, and get a MUCH LOWER deductible and better coverage. I will sleep better at night! I'll be waiting at the computer screen on Nov. 15.. but anxious to hear how this went for folks who bought in last year. Your posts are always timely,Bob!! Come visit us in Pine if you head for the hills in your RV this falL!!

We are done with the RV until January. I just had it washed and waxed. This weekend we put a tarp over it to keep dust and muck off of it for a few months. But, we have already blocked out RV trips within the state for next February, March, and April. One of those WILL involve a trip to the Payson area.

Betty's costs dropped by 40%, due in large part to the tax subsidy. Coverage is amazingly better and she kept her old doctor. My biggest fear this time around is the system hasn't flushed her messed up application from last year and we run into the same roadblocks again.

Thanks for the timely article. We are in the same boat as you guys only I am the one that needs health coverage for the next 4 yrs. looking forward to hearing others' feedback and experience as I determine what next.

I hope you get the info you need, Rick. After the initial hassle, our experience was very positive. I bought insurance through the site to cover me from January 1st until Medicare started in May. I had no problems and saved almost $200 a month for those 4 months.

It's times like these that I am thrilled I have TriCare for my military retirement medical plan. That will turn into my 'medigap' when I reach 65. I will still have to pay the $104 per month at 65 yrs old but I'll have the pharmacy plan through TriCare.

Last year I was curious about the Healthcare.gov site and was able to get in. I wanted to compare health care plans and cost for me just as a reference. At the time I was working and getting a plan through my employer, using my TriCare as a secondary. As a single person I was paying $135 per month for the employee plan. Im sure they were paying 2-3x more than that to cover me. Lets say between me and the company my plan would have cost $450 per month.

Healthcare.gov gave me 5 choices of health plans, 1 of those was the same I was receiving at the time through my employer. It would have cost me $715 per month for the same plan I was paying for through my employer.

I've read good and bad stories online about the program. From people I know, not one person has the better deal. Their costs went up and their deductibles went off the charts. Many are scared about what happens in 2015. All of my friends that are still working, work for major corporations, I don't know anyone in small business to see how that will affect them.

Bottom line ... I thank my lucky stars that I am retired military with a plan already in place.

Betty and I are the exception couple, then. Both of us saved lots of money, had zero deductibles, lower copays, and a full range of choices. The only people I know who fared worse were those who went from an employer-provided policy to one on the open market, or those who switched from a bare-bones catastrophic policy to one that covered normal expenses.

Unfortunately, the trend of employers providing reduced coverage with higher deductibles and copays, a trend that had been underway for many years, did accelerate after the law took effect when many eliminated insurance.

What most people don't realize is how much insurance was costing their employer. These folks had an artificial view of the true costs under our for-profit system. When their work coverage ended or was scaled back, they were shocked to find out how many health insurance companies were actually charging.

My son-in-law was in the Navy when two of his children were born - TriCare was tremendous. You are in a good place.

I worked in finances and use to try to explain to a lot of co-workers that their amount taken out of their checks for health was only a 1/3 or 1/2 of the "real cost" of their policy. In the corporation I worked in, at their new calendar year, they changed their health policy. Even for salary employees, they would pay $3.17 per hour extra and everyone could find their own health insurance. Needless to say, total caos and an unexpected surprise. That goes into affect January 1 for them.

A few others are finding in their employer-provided policy, their deductibles are increases by the thousands.

I think and have always said, 2015 will give a true picture for individuals and businesses, if the new healthcare plan works. There are going to be many financial changes for both unless they decided to hold off on the requirements for another year.

What appears to be happening is the true cost of our health care system is becoming unmasked and obvious to everyone. The cries of complaint are understandable since until now most of us had no idea what stuff really costs, even as it became more and more unaffordable to the employers. Maybe universal Medicare will look better at some point.

I'm in the process of trying to change my insurance from PA to NJ, and it's a real pain. I never thought I would look forward to turning 65 until now. In the meantime I'll have to make do and pay ridiculous fees. However, it's good to know we can get coverage, when so many can't.b

Yes, that Medicare card is so welcome. Life becomes so much simpler. Since May I have had several CT scans, scopings, an upcoming colonoscopy (oh, joy!) and numerous blood tests that have cost me nothing beyond my monthly premiums. The joy of no deductible and no copay cannot be overstated.

It is instructive to see a statement from Medicare that shows a $295 doctor visit, reduced to the approved Medicare amount of $59, all of which is covered by Medicare and the Medigap policy. That $295 is what someone without insurance would have been charged.

Our decision this year was an easy one, we are just renewing our ACA exchange policy as is since it is the only option that covers our medical group. Our premiums went up last year under the new law but since the type of medical costs we incur are all preventive in nature, we broke even (paid more in premiums, insurance covered more.) So we're pretty much even-steven.

This year, our premium will go up another 11%--partially because we move up into a new age band, and partially because of the normal increases. In the 7 years of our retirement and purchasing individual policies, this is the smallest increase we've ever seen. So far so good.

Thanks for your experience, Syd. You mentioned preventive services which is something I think tends to be overlooked. There are several tests and preventive screening that are provided at no cost. Those used to really add up.

I have been fortunate to be able to purchase into a group plan that includes many retirees from my former employer. It is reasonable for now, and will probably get me safely to Medicare.

I have always supported the idea of Medicare for everyone. Having the young and healthy participate, along with some serious discussion about end of life care options would work to stabilize the costs-- I think. But I fear the system will have to "crash and burn" before we can truly craft a long term solution-- and it will most likely be done out of urgency. It is the way we do things now. Crisis management seems to be our approach to every problem these days.

We have become a society that puts out the fire instead of looking for ways to prevent it in the first place. Then, we find someone to blame for our lack of foresight, That's not an efficient way to run anything.

My COBRA coverage will end next May. Surprisingly the premium was about the same as coverage that was available on my state's exchange. I do not qualify for a subsidy. Costco is pushing their health plans now with Aetna. I'd be interested in anyone's experience with this.

I think it is a sad day when our great,rich nation has its citizens shopping in the Big Box stores for their health care! Other countries make their citizens health a priority,why not the U/S/ (Well, I know the answer to that: Big Pharma and the AMA lobby.) What a crime! I hope we see better days.In the meantime I will be grateful for the ACA plans, at least.

In this case I have to disagree, Madeline: the more places someone can shop for affordable health care the better. If places like Walmart or Costco help folks without Internet access or computer skills see their choices, then that should be a good thing.

We'll continued to receive retiree coverage under my wife's former employer, a self-insured government entity. Because it is so good, and our costs so low, we are one couple that does not look forward to Medicare since our costs will rise. But we'll have Deb's employer as the secondary payee regardless.

Your comment around the billed vs negotiated cost of healthcare reminded me of the statements I saw for my ankle surgery this past June. When all the bills were tallied the cost of surgery and doctors (no overnight stay) was over $30K. The pre-negotiated rate, which was accepted as full payment? Just under $3K. That was one of the most glaring examples of billed versus paid amount I have seen.

I gather hospitals, et al come up with these ridiculously inflated charges so they can write off the "loss" between the published rate and the fees they will actually receive, even though they never would get the $30,000 regardless .

I'd like to see a single-payer system eventually, but am glad this initial large project has been done. I imagine the costs changes will vary. The people I know who purchased ACA policies are happy with expanded coverage and no pre-existing condition limitations. For Medicare folks like us, it's much easier.

My family would rather see a single payer program. Most of my nephews and nieces have not been hired by the corporation/hospital or school they work in. They are contract workers and have to find their own health care. Since they are absorbing 100% of the costs, they are paying much more.My brother's insurance went way up, but he now has full coverage. I think it is a good thing. Holding your breathe anticipating an emergency is not a good thing. Still, a single payer program would fully cover him. We are in the Tricare loop. My husband will actually have to pay for the "free health care for life" that he was promised when he signed those first papers for Vietnam. It is only $100 a month. I find it ironic that he has finally reached the place where most citizens sigh with relief, he sighs with distain that he has to pay for Medicare!My family has lived "socialized medicine" for the last 35 years. Somehow it needs to go that way! ~Janette

I am not sure I really understand people's fear of a single payer system. Medicare has always been that. Social Security is basically a "socialized" program yet I have never heard of anyone saying they won't accept that monthly check.

I think almost all of the complaints and violent reactions are due to change. Humans hate change, even when they know the previous system was broken and destined to cost more and more each year.

Janette ... I wasn't happy either when I found I had to pay the $104 per month for a service I already have for free up until I'm 65. I too am on TriCare. At least we have the TriCare For Life as a "medigap" supplement. I still will not be thrilled with the increased payment.

Yes it was to end at 65 years of age. At the very end of President Clinton's term, months if I remember right, he suggested TriCare remain as a 'gap' insurance for all military retired because they were told they would have free medical for life when they enlisted and retired after 20 years of service. It is a great deal. I don't know the current cost for Medigap insurance now but a few years ago my father in his 80's was paying a fairly good amount for it.

Bob, thanks so much for this post and for requesting that we keep comments nonpolitical. I think that is why you received so many good comments that spoke in terms of facts and personal experience. I am lucky to have been a state employee, and so I get a combination Medicare/ Blue Cross combination policy called Medicare Advantage that costs me $270 per month for coverage that is in addition to Medicare Part A and B. I also have about $100 deducted from my Social Security check each month to pay for Medicare Parts A and B. My combination policy includes Part D for drugs. The $370 monthly cost is still a lot, but I think it is less than some would pay who aren't 65. I've seen the figures for local counties here, what the county employees are paying, and it's HUGE: $800 for a single person and $1000+ for family coverage. That's per month. I don't know how people do it. I am glad that Obamacare is in effect for two reasons that affect me: no exclusions for pre-existing conditions, and no cost differential for men's and women's premiums. I invite you to check out my most recent blog post, Building a Legacy Plan, at www.thingscouldbeworse.org.

As someone who has government (as in federal government) insurance, and who was in the military system for some time I would only observe this: All readers who oppose federal government interference should go to this website, and look at the summary of benefits and price. I pay 241 for a family plan, because the federal government negotiates on behalf of the hundreds of thousands of government employees and as well as negotiating price, guarantee things such as birth control, preventative care, and more. And you know what? They save themselves money as well.

Now, my son will turn twenty six in February, so during open season we will be looking on the market for insurance (unless he joins the army, which he is researching now). Since my family coverage is 241 and my individual coverage is 106, that was my standard. With the supplements, his insurance will be less. His copay for somethings may go up, but at a young and healthy 26, that's reasonable in my opinion.

I do agree. We are now seeing the real costs of health care in this country, which is more expensive per person than any other western country. The ACA has simply not addressed that, nor has anyone else.

Barb- asking for my daughter. Which insurance are you using? Is it military or federal employee? If it is federal employee, which one? They are paying three times that amount on a monthly basis. She would love to know which one it is!

Janette, My insurance is through the FEHB system (open season is coming) and it is Geha-I'm in Texas, There is high option, standard option, and HSA accounts,. We have had this company since 2002 and been very happy. I pay a monthly rate since I am no longer an employee but a survivor, when my husband was living that was of course paid every two weeks and a different amount.

I am not an expert and cannot speak to other plans, but this is the page. Feel free to contact me if you like. As I am sure she knows, open season begins the tenth and the fehb website has a way to compare plans. https://www.geha.com/Plans-and-Benefits/Standard-Option

Bob I hope it's okay to comment as a non-retiree. I'm just Weeks shy of 57 and have been concerned about healthcare coverage. My employer will be moving to a high deductible only plan in 2016. We're still eligible for their retiree benefit provided we started before 2007. I have 10 months to qualify based on time and age. Naturally I am crossing my fingers that I can make it without any problems. Their group health plan will get me to medicare, but I'll need to work until I'm 63-1/2 to retire and pay the premiums out of my HSA. It's all so nerve wracking. I'm saving now to have the funds to cover the gap.

Gail, a lot of the readers of this blog are non-retirees, so your input and thoughts are encouraged.

I feel sorry for employers who want to continue to do the right thing for employees by making health care coverage available. They are being squeezed by the insurance companies just like all of us but have a ton of extra paperwork and hoops to jump through. A high deductible plan is about the only option health companies are giving them. Shifting costs to employees is tough but does have one upside: it lets us see how much health care really costs with our for-profit business model.

My wife and I will be retiring in 16 months at ages 57 and 55. Since we won't qualify for Medicare we'll be signing up for ACA coverage. But, after looking at the cost and coverage for all the plans in my state (Oregon), I'm very puzzled. There are more than 50 plans available but the least expensive plan always ends up costing the least overall - under any scenario. For example, the cheapest plans are around $250/month with subsidy while the most expensive are $1,200+. The higher cost plans have little to no deductible whereas the least expensive plans have deductibles of $5,000 annually. With the high deductible you might think the low cost plan would be more expensive. But with an ACA max out of pocket expense of $6,350/annually, the least expensive plans are always cheaper.

For example, the $250/month plan would cost $3,000/year for the premium and then $6,350 max out of pocket after that for a total maximum annual expense of $9,350. The low deductible $1,200/month plan would cost $14,400 just for the annual premium alone.

My question - why would anybody get anything other than the least expensive monthly plan?

I keep telling my wife I must be missing something. I don't even understand why they have bronze/gold/silver plans. With the max out of pocket set at $6,350 ($6,600 for 2015), the cheapest plans win every time! I hope somebody can point out what I'm missing because I only have 16 months left to figure this mystery out!

Here in Arizona, out of over 50 options, my wife selected a gold plan because it had no deductible, low copays, and a shorter window before hospital coverage kicked in. The cost, after subsidy, is $362 a month. While certainly not cheap it is almost $200 less than her policy before ACA and with substantially better coverage.

That policy will not be available for 2015 so we must go through the process again to get her insured for next year. We may scale back to a silver plan depending on price increases, though the $8,800 ER visit in June that ended costing us just $150 made the gold choice seem smart at the time.

It sounds like you have better plans available in AZ. The lowest deductible plan I could find here in OR was $500 and the monthly premium after a $355 subsidy was $877! I created a spreadsheet listing all 50 plans in OR. Whether you compare the minimum annual expense (just the premiums) or the maximum (annual premium plus max out of pocket), the least expensive monthly premium is the cheapest overall. I still don't know why anybody in OR would choose any other plan. I appreciate this post Bob! Prior to the ACA, health care was a total unknown for many retirees. If not for the ACA, I wouldn't retire until I was eligible for Medicare.

I have mentioned it before, but the PBS documentary "Sick Around the World" is an excellent overview of how other affluent countries manage healthcare for their citizens. Still interesting and worth a look if you have not seen it.

I have watched it and marvel at how out of sync our system was and still is. I will never understand how strongly people want to defend our approach and turn back the clock to return to a system that was barely functioning unless you were healthy and/or rich.

I feel fortunate to be able to buy insurance on the exchange. My husband just enrolled in Medicare and I can be insured without having to work full time. I have a big deductable but my annual physical was covered. I am very very frightened that a new Congress would rescind ACA.

No worries about a new Congress rescinding the ACA. President Obama would immediately veto such an effort. The House has tried over 50 times. I imagine if the election results later tonight confirm a GOP dominated Senate that effort will continue. Disenfranchising over 10 million people who have coverage through the ACA makes such actions impossible anyway.

Can you imagine the nightmare if the entire health insurance industry and all medical systems were suddenly told, just kidding, put it all back the way it was. The genie is not going back into that bottle.

Bob Lowry is the author of the definitive retirement guides: Living A Satisfying Retirement and Building A Satisfying Retirement.Bob has been profiled in Money Magazine & CNN Money as well as Ad Age Insight White Papers. He is a featured author in nationally released book, "65 Things To Do When You Retire," "65 Things To Do When You Retire - Travel," and "70 Things To Do When You Turn 70," as well as an original contributor to PBS's Next Avenue web site.